No. It has Java syntax and the code is executed by Dalvik runtime, which is a register based custom virtual machine. Pay a visit to AndroidFAQs(link in my signature).

2. If not, is it platform neutral? How exactly it fits the bill?

Android is not just a language. It is a complete software stack. Read What is Android?

3. Are there any significant changes one has to adopt while switching from normal Java EE web apps to Android? What would you suggest?

Android apps can be written purely in Java, a mix of Java and native(C) code or using HTML and javascript depending on what the requirement is and which option suits which. Learning Android might become easy if you know any of these languages. You will obviously have to learn Android specific things like packing, signing the app among other things.

6. Pro Android Web apps -- basically Android is for Mobile Apps. Right? Is nt it contradicting? I may be wrong on my understanding.

As per the Android FAQ,it still says, "Android is a software stack for mobile devices that includes an operating system, middleware and key applications". How is the "Android Web Apps" then? I am slightly confused. What is the term 'web Apps' has to do here?

Mobile applications that run on Android can be written purely in Java, a mix of Java and native(C) code or using HTML,CSS and javascript. Android Web Apps, IMO, means writing your application taking the third approach. It is supposed to provide an answer to the problem of developing platform agnostic mobile apps.